Closing Costs the Seller may pay – Michael Halpin, DeLand, FL

Your Guide to DeLand Real Estate & Volusia County Properties

What Closing Costs Can the Seller Pay?

Many buyers (particularly first-time buyers) are short the cash they need for the down payment and closing costs. One way to overcome this cash shortage is for the seller to pay a portion of the closing costs. How much the seller is allowed to contribute depends on the type of mortgage loan.

Conventional Loans
On a conventional loan, the seller can only pay non-recurring costs. These do not include pre-paid items or items to be paid in advance (such as mortgage insurance or hazard insurance). The seller's contribution is limited to the amount the buyer is putting down. If the buyer puts 10 percent or more down, the seller may contribute up to 6 percent. If the buyer puts less than 10 percent, the most the seller may contribute is 3 percent.

VA Loans
On a VA loan, the seller may pay all the closing costs (this is known as a "VA-No-No" - the buyer pays no down payment and no closing costs). Sellers who agree to pay the closing costs often put a ceiling on the amount they will pay.

FHA Loans
On a FHA loan, the seller may pay all the closing costs. However, the buyer must make a minimum 3 percent investment in the property - whether as part of the closing costs, a down payment or pre-paid items. The 3 percent can be from the buyers own funds or from a family member's gift.

Asking the Seller to Pay a Portion or All of Closing Costs

The seller's willingness to contribute to closing costs is often driven by market conditions and the way in which the request is made to the seller.

As your real estate agent, I will help you prepare an offer that balances the purchase price and request for closing cost assistance with the dynamics of the current marketplace. For instance, in a seller's market we may increase the offered purchase price to offset the request for closing cost assistance.

Remember - When you ask the buyer to pay a portion or all of your closing costs, in essence you are financing the closing costs. This is because the seller's contribution is typically offset by a higher purchase price. And it is this higher purchase price that is financed with your mortgage loan.

Your Guide to DeLand Real Estate and Volusia County Properties around Central Florida including these areas: DeLand, Orange City, Glenwood in DeLand, Victoria Park in DeLand, Victoria Commons in DeLand, Victoria Hills in DeLand, Brandywine in DeLand, Bent Oaks in DeLand, The Reserve at Bent Oaks in DeLand, Tomoka Woods in DeLeon Springs , Barberville, Beresford Lakes Terrace in DeLand, Hontoon Peninsula in DeLand, St. Johns River along Volusia County, Lake Beresford in DeLand, River Ridge in DeLand, Hontoon Marina in DeLand, Quail Hollow in DeLand, Blue Springs in Orange City, Daytona Park Estates in DeLand, Enterprise, Enterprise in Orange City, Saxon Woods in Orange City, Longleaf Plantation in DeLand, DeBary, DeBary Golf & Country Club, DeBary Plantation, Deltona, Lake Helen, Cassadaga, Osteen, DeLeon Springs, Astor, Pierson, Seville, Lake Lindley, Lake Winnemissette, Samsula, Sanford, Lake Mack, Lake County, Whisperwood Mobile Homes, Meadowlea Estates Manufactured Homes, The Oaks, North Ridge in DeLand, Stetson University, Port Orange, Ormond Beach, Countryside, Holly Hill, Samsula, Forest Trace in DeLand, Mallory Square in DeLand, Port Orange Landings, Daytona Beach, Daytona Beach Shores, Seminole County real estate, Sanford, Orlando, Orange County real estate, DeLand Mobile Homes, A Better Place, Shops of DeLand, The Trails, Trails West in DeLand, Glenwood Springs in DeLand, Berry's Ridge in DeLand, Northridge in DeLand, Riviera Bella in DeBary, Blue Lake in DeLand, Glenwood Reserve in DeLand, Stone Island in Deltona, Glenn Abby in DeBary, and more!

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